Goldman Sachs thinks VF Corp's latest strategic moves will boost the stock.
The firm double upgraded the parent company of Vans and The North Face to buy from sell with a new price target of $27 per share. That equates to 23.7% upside from the stock's Thursday closing price of $21.82 per share.
"VFC's revenue and earnings trajectory has underperformed the market, but we believe the stock is nearing an inflection point with the balance of catalysts for the stock now weighted to the upside," analyst Brooke Roach wrote Friday.
Roach pointed toward new product innovation for its Vans segment, improved inventory management and cost controls as well as the wide field of management choices available to fill the chief executive position, currently held by interim CEO Benno Dorer. Roach also added the company's efforts to lower debt and the re-opening of China as positive factors.
"Looking ahead, we believe strategic initiatives now in place to improve execution will drive relative outperformance in the stock," Roach said.
For Vans, Roach thinks that a new line of products like the Knu Skool sneaker will add to growth into 2024, while short-term weakness is "well appreciated by investors and already embedded in management's guide (which forecasts brand revenue declines through September 2023)."
Still, the bullish call could still be early for the company, Roach added, and some of the strategic shifts could take time to fully be realized due to factors like supply chain headwinds and future innovation.
VF Corp shares popped more than 4% in the premarket. However, the stock has struggled this year, losing nearly 21%.
— CNBC's Michael Bloom contributed to this report
